Fitch reports slowing subprime delinquencies, foreclosure sales
As the job market improves, delinquency rates on subprime loans are falling, according to a new report from a subsidiary of Fitch Ratings. The percentage of borrowers with mortgages classified as 30 or more days delinquent fell by 5.3% in March from February and the percentage of borrowers who are 60 days or more delinquent fell by 4.4%, according to a report composed by Fitch Solutions director David Austerweil. "Recent improvements in the job market are translating into falling subprime delinquency rates," said Austerweil. "Additionally, fewer subprime borrowers are rolling from the early stages of delinquency to the later." Fitch Senior Director Alexander Reyngold said "homes in foreclosure remain near record highs, while foreclosed homes sold each month continue to decline. Loan loss severities increased proportionally to the time required for the loan to be liquidated over the last year." Meanwhile, subprime credit-default swap prices rose for the fifth consecutive month as the performance of the underlying collateral -- namely subprime loans -- improved. However, increasing foreclosure times are dragging down the market. Higher loss severities can lead to lower credit default swap prices as losses to the reference bond also impact the CDS. Write to Kerri Panchuk.